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Economic growth in Namibia: The uncomfortable truth
Economic growth in Namibia: The uncomfortable truth

Economic growth in Namibia: The uncomfortable truth

Staff Reporter
ESAU NATANGWE

KANGANDJERA



Namibia has a small, open economy with an estimated population of 2.5 million citizens, of whom an estimated 700 000 are actively employed in various business undertakings. Moreover, the total surface area of the country is 825 419 square kilometres with an abundance of natural resources, but Namibia has been characterised by a significant unequal level of income distribution among its population. Unemployment is rampant amongst the majority disadvantaged citizens with poor housing and poor basic amenities such as water, electricity supply and health facilities. The unenthusiastic efforts of the government and the private sector to redress these socio-economic inequities have caused a sense of discontent in some quarters of the majority poor Namibian citizens.

The economy of Namibia is characterised as a country that consumes what it does not produce and produces what it does not consume. The following topics will assist in sketching a brief synopsis of the current economic situation of Namibia. Economic growth, per se, purports the total value of the production of goods and services adjusted to provide for intermediary goods and services and depreciation of capital goods. Thus, can one argue that the efforts of the government and the private sector to bring about economic growth have been effective to this point or not.



Inflation

The phenomenon of inflation in the economy has become a far more complex problem... A plethora of definitions of inflation had been developed but due to the complex nature of inflation, focus will be made on a rather accurate definition coined by Turve which stated as “ a process resulting from competition in attempting to maintain total real income, total real expenditure and/or output as a level which has become physically impossible”. Moreover, specific aspects emerged from the foregoing definition in that inflation is not an occurrence but a process resulting from competition of which the latter strives to maintain real income and expenditure unhindered at the same level

A definition that tells us more about the nature of inflation is the general rise in the average price index. Deducing from the latter definition this does not necessarily mean that inflation is looming when there is an increase in the price of one or two products. A general rise in prices on a wide spectrum portends inflation, and the increases should be such that the average price index rises.

In this part of the economy attention is given to those factors that determine the scale of total income flow between households and business undertakings or how this flow of income changes totally over time.

Macro-economy therefore studies the characteristics and determinant factors of the whole economic cycle. The area of interest here is the prices and quantities prevailing in the magnitude of individual markets for goods and services.

Thus, macro-economy adds together the activities of all the individual markets and investigates the flow of income in the economy or the total average price of all goods and services (the general price level).

If the total value of the production of goods and services is adjusted to provide for intermediary goods and services and depreciation of capital goods, an important measure of production in the economy is obtained, namely the gross domestic product (GDP). The latter is defined as the total value of final goods and services produced within the borders of a country before allowing for depreciation. GDP, therefore, is the most important measure to gauge the economic welfare in the economic environment of a country.

In the financial year of 2020/2021 a revenue income of N$51.4 billion as opposed to an outflow expenditure of N$72.8 billion was registered.

With a revenue shortfall of N$21.4 billion arising in the current year, government borrowing will increase to N$119.1 billion, reflected in the gross debt-to-GDP ratio climbing from 54.8% in 2019/20 to 69.6% in 2020/21.

The foregoing figures obviously indicate an increase in the level of the national budget, but does this mean that it can be deduced that there had been economic growth during the periods under review?

Note should be taken in cognisance of the fact that Namibia is characterised as a country that consumes what it does not produce and produces what it does not consume. Namibia imports canned food products and other food stuff, clothing items, ICT equipment, building tools and construction materials, in fact, almost everything is imported into Namibia.

It is against the backdrop of the preceding topics that a question is asked therefore that, can it be confidently and comfortably be stated whether Namibia recorded positive and productive economic growth since 1990 till 2020 or not?



Conclusion

The foregoing topics indicate a rather uncomfortable reality about the contemporary economic environment of Namibia. Can it thus be concluded that the various role players involved in the economic system of Namibia have reached the ultimate goal of bringing about positive and productive economic growth or not?

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Namibian Sun 2024-03-28

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Katima Mulilo: 19° | 37° Rundu: 17° | 33° Eenhana: 18° | 33° Oshakati: 20° | 31° Ruacana: 19° | 33° Tsumeb: 17° | 29° Otjiwarongo: 16° | 28° Omaruru: 18° | 31° Windhoek: 17° | 28° Gobabis: 17° | 28° Henties Bay: 16° | 19° Wind speed: 24km/h, Wind direction: S, Low tide: 10:54, High tide: 04:57, Low Tide: 22:58, High tide: 17:16 Swakopmund: 15° | 17° Wind speed: 29km/h, Wind direction: SW, Low tide: 10:52, High tide: 04:55, Low Tide: 22:56, High tide: 17:14 Walvis Bay: 16° | 22° Wind speed: 33km/h, Wind direction: SW, Low tide: 10:52, High tide: 04:54, Low Tide: 22:56, High tide: 17:13 Rehoboth: 18° | 29° Mariental: 22° | 32° Keetmanshoop: 21° | 34° Aranos: 21° | 31° Lüderitz: 15° | 29° Ariamsvlei: 23° | 34° Oranjemund: 15° | 21° Luanda: 27° | 30° Gaborone: 20° | 32° Lubumbashi: 17° | 24° Mbabane: 15° | 23° Maseru: 12° | 28° Antananarivo: 16° | 27° Lilongwe: 17° | 29° Maputo: 20° | 28° Windhoek: 17° | 28° Cape Town: 17° | 23° Durban: 21° | 25° Johannesburg: 18° | 28° Dar es Salaam: 26° | 32° Lusaka: 18° | 30° Harare: 15° | 31° Currency: GBP to NAD 23.87 | EUR to NAD 20.44 | CNY to NAD 2.62 | USD to NAD 18.92 | DZD to NAD 0.14 | AOA to NAD 0.02 | BWP to NAD 1.33 | EGP to NAD 0.39 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.74 | ZWL to NAD 0.04 | BRL to NAD 3.8 | RUB to NAD 0.2 | INR to NAD 0.23 | USD to DZD 134.27 | USD to AOA 832.63 | USD to BWP 13.71 | USD to EGP 47.35 | USD to KES 130.98 | USD to NGN 1415.13 | USD to ZAR 18.93 | USD to ZMW 25.01 | USD to ZWL 321 | Stock Exchange: JSE All Share Index 73909.5 Up +0.41% | Namibian Stock Exchange (NSX) Overall Index 1516.02 Down -0.13% | Casablanca Stock Exchange (CSE) MASI 12981.98 Up +0.34% | Egyptian Exchange (EGX) 30 Index 28224.37 Down -2.87% | Botswana Stock Exchange (BSE) DCI Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 219.48/OZ UP +1.31% | Copper US$ 3.98/lb UP +0.01% | Zinc US$ 2 453.40/T DOWN -0.13% | Brent Crude Oil US$ 87.37/BBP UP +1.14% | Platinum US$ 906.04/OZ UP +1.25% Sport results: Weather: Katima Mulilo: 19° | 37° Rundu: 17° | 33° Eenhana: 18° | 33° Oshakati: 20° | 31° Ruacana: 19° | 33° Tsumeb: 17° | 29° Otjiwarongo: 16° | 28° Omaruru: 18° | 31° Windhoek: 17° | 28° Gobabis: 17° | 28° Henties Bay: 16° | 19° Wind speed: 24km/h, Wind direction: S, Low tide: 10:54, High tide: 04:57, Low Tide: 22:58, High tide: 17:16 Swakopmund: 15° | 17° Wind speed: 29km/h, Wind direction: SW, Low tide: 10:52, High tide: 04:55, Low Tide: 22:56, High tide: 17:14 Walvis Bay: 16° | 22° Wind speed: 33km/h, Wind direction: SW, Low tide: 10:52, High tide: 04:54, Low Tide: 22:56, High tide: 17:13 Rehoboth: 18° | 29° Mariental: 22° | 32° Keetmanshoop: 21° | 34° Aranos: 21° | 31° Lüderitz: 15° | 29° Ariamsvlei: 23° | 34° Oranjemund: 15° | 21° Luanda: 27° | 30° Gaborone: 20° | 32° Lubumbashi: 17° | 24° Mbabane: 15° | 23° Maseru: 12° | 28° Antananarivo: 16° | 27° Lilongwe: 17° | 29° Maputo: 20° | 28° Windhoek: 17° | 28° Cape Town: 17° | 23° Durban: 21° | 25° Johannesburg: 18° | 28° Dar es Salaam: 26° | 32° Lusaka: 18° | 30° Harare: 15° | 31° Economic Indicators: Currency: GBP to NAD 23.87 | EUR to NAD 20.44 | CNY to NAD 2.62 | USD to NAD 18.92 | DZD to NAD 0.14 | AOA to NAD 0.02 | BWP to NAD 1.33 | EGP to NAD 0.39 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.74 | ZWL to NAD 0.04 | BRL to NAD 3.8 | RUB to NAD 0.2 | INR to NAD 0.23 | USD to DZD 134.27 | USD to AOA 832.63 | USD to BWP 13.71 | USD to EGP 47.35 | USD to KES 130.98 | USD to NGN 1415.13 | USD to ZAR 18.93 | USD to ZMW 25.01 | USD to ZWL 321 | Stock Exchange: JSE All Share Index 73909.5 Up +0.41% | Namibian Stock Exchange (NSX) Overall Index 1516.02 Down -0.13% | Casablanca Stock Exchange (CSE) MASI 12981.98 Up +0.34% | Egyptian Exchange (EGX) 30 Index 28224.37 Down -2.87% | Botswana Stock Exchange (BSE) DCI Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 219.48/OZ UP +1.31% | Copper US$ 3.98/lb UP +0.01% | Zinc US$ 2 453.40/T DOWN -0.13% | Brent Crude Oil US$ 87.37/BBP UP +1.14% | Platinum US$ 906.04/OZ UP +1.25%